There are many theories about the right size for your first dollar store. If you are opening a dollar store I recommend that you open the largest store possible. However, I also caution that it is critical to have adequate funding to properly operate a larger store.

Opening a dollar store requires more money than one would think. While the total investment in inventory will likely be smaller than opening a retail store in another product line, replenishment is a much bigger investment than would be expected. Not having backup cash available for replenishment merchandise can doom your store to failure.

The presence that a larger store makes can create a buzz in the community. The larger size allows the store to carry a much wider assortment of products. It is also possible to carry a wider range of items in both brands and features within a product category. This creates the opportunity for more sales.

Opening a dollar store with a larger retail sales floor positions the small entrepreneur to more successfully compete head-on with major national chains. Larger stores almost eliminate the competition associated with smaller locally owned dollar stores.

Opening a dollar store that is larger also opens the opportunity for complementary business operations. Case lot sales and wholesale distribution are both very possible.

With the higher volume that a large store must sell lower cost of goods sold is much easier to achieve. Lower cost of goods sold can mean more profits for the owner who is opening a dollar store.

If you are opening a dollar store consider opening the biggest store possible. Be prepared for the added work and the added investment. Know that with successful marketing and cash management a larger store can create lower costs and more profits.

To Your Dollar Store Success!

Dear Fred & Lyna:

I am tired of working for someone else. After reading your article on accessing your entrepreneur level, I feel confident that I have what it takes to own my own business. But I'm not sure what type to start. I love making candles; but don't know if this would support me. Help.

Ann- Montgomery

Fred: This reminds me of a couple I knew who traveled for years staying in bed and breakfast inns across the country. They absolutely loved the bed and breakfast business. So, one day they both quit their jobs and bought a B&B in Northern California
.
Lyna: Was it successful?

Fred: It might have been, but about a year later they were miserable. All they did was complain about how much work it took to run the B&B and how they had to be there 24/7. They felt like prisoners.

Lyna: Which is why before Ann gets serious about having a candle business, she should do some research. What have other people done to sell candles?

Fred: She could have a storefront and work as a retailer. Or if this doesn't appeal to her; selling her candles wholesale may be the way to go.

Lyna: Of course with both of these choices she needs to ask herself if she wants to eventually hire employees. After all- to be successful she would need to sell a lot of her product and it would be impossible to make it all herself. As her business grows, she would need more of a sales force- either in the store or on the road selling to others.

Fred: E-bay is always an option- but again, how would she keep up with the demand?

Lyna: I would recommend to anyone; to find other people who are doing what you feel you might want to do. For an art or craft like candle making, check art associations, galleries or artist studios. The Internet is also a valuable source of information. Find someone who is doing what you want to and talk to them; get the pros and cons of this type of business.

Fred: Or why not offer to intern with them for a few months? Not only would they learn the business first hand, but they could also see if they truly have a passion for that kind of work before they spend a dime on.

Lyna: Another avenue to look into would be to write books on candle making and give workshops on it. This is a great way to start establishing yourself as an expert in your field and the only other person you may want to consider hiring as you become successful is an assistant.

Fred: The best advice I feel we can give is - don't quit your day job until your new endeavor is well under way. Although it may not be easy, start part time and that way you won't have the added stress that would come when your bills are due.